Low supply and high demand continue to define Boston’s multifamily housing market. With a finite amount of available land, adaptive reuse is becoming an increasingly popular way to bring new multifamily inventory to market at a time where the appetite for apartment housing – be it workforce level or luxury – seems nearly insatiable.
Multifamily units in close proximity to mass transit, jobs and lifestyle amenities remain at peak demand. Data shows that these walkable communities are attracting not just young professionals and the millennial generation, but also empty nesters who are selling their large suburban homes and migrating to cities. RENTCafe’s analysis of Census Data found that senior renters are actually the fastest growing renter segment in the U.S. and that the number of renters over age 55 has increased by 28 percent. Meanwhile, the National Association of Realtors found that 62 percent of millennials prefer living in walkable communities.
Gentrification is breathing new life into neighborhoods across Greater Boston. A recent report by Governing Magazine shows that since 2000, more than 20 percent of the Census tracts in Boston that were eligible for gentrification have done so, resulting in a 50 percent increase in home prices in some neighborhoods. Most recently, East Boston, South Boston and Dorchester have begun to reap the benefits of gentrification, spawning new development which is, in turn, driving up asking rents. As these neighborhoods come into their own, offering improved access to transportation and jobs, investors can benefit from buying undervalued Class-B and Class-C assets and making capital improvements that will lay the foundation for increased occupancy, sustained rent growth and higher returns.
Adaptive reuse and transit-oriented development are two prominent trends shaping the Northeast investment real estate market. As vacant office properties, abandoned mills and defunct retail assets are adapted for new uses such as multifamily housing, investors have opportunities to acquire Class-B and Class-C assets below market value and create the conditions to establish and maintain in-demand housing units.
Bad news for prospective homeowners is good news for multifamily investors in the Rhode Island submarkets.
The recently passed tax reform package represents the most sweeping tax reform the country has seen since the Tax Reform Act of 1986 and will shift the dynamics of the real estate market in 2018 and beyond. While changes to mortgage interest and local and state deductions may adversely impact many homeowners, the new provisions are generally seen as positives for real estate investors and developers. In fact, many of the provisions passed will help investors by putting more money back into their pockets
Thanks to our strategic partners at IPX1031 for the following insights. For more detail on tax reform and local market forecasts, please visit https://www.northeastpcg.com/register2018 to register for upcoming investor workshops with IPX1031 in New York, Connecticut & Massachusetts.
Hartford, Conn. and Springfield, Mass. are both markets offering upside for value-added investors. With the expansion of transportation along the Hartford-Springfield corridor and job creation from the new MGM Springfield, this is an opportune time to consider acquiring a Class-B or Class-C property to reposition as part of your investment real estate portfolio. Here are some of the trends currently shaping the Hartford-Springfield market.
Record-high asking rents and selling prices for commercial real estate in the five boroughs pose an ongoing challenge for investors seeking to maximize returns. A recent article in The Journal News notes high asking rents and the conversion of commercial space into residential in Manhattan is now driving companies to explore options in Westchester County. Among the Westchester communities where these businesses have found new commercial space are Elmsford, Mount Vernon and Yonkers.
While continued delivery of new construction Class-A multifamily is resulting in softer rent growth and occupancy at the high end of the Boston area market, savvy investors are continuing to seek Class-B and Class-C opportunities in neighboring submarkets where they can add value to existing multifamily, mixed use and retail properties, and maximize returns. For these value-added investors, Boston’s North Shore and Merrimack Valley submarkets offer such properties in close proximity to mass transit, highways and downtown amenities.